Victim of cryptocurrency ATM scam in Newton is relying on new Iowa law to refund her stolen money

Linda Ratcliff, of Newton, does not understand why she didn’t just hang up the phone or figure out sooner that the instructions she had been given seemed suspicious, but in reality the nameless caller never gave her a chance to think clearly and kept her in a constant state of panic so he could steal her money.

The 73-year-old was scammed out of $2,000 earlier this summer. Since then she has been working with her banker at Advantage Credit Union and even the Iowa Attorney General’s Office to reclaim her stolen money. So far, there has been some progress. She received a check in the mail for $1,000.

Except she hasn’t cashed it yet.

Ratcliff believes doing so will absolve companies like Bitcoin Depot — the cryptocurrency company whose Bitcoin ATMs facilitated the scam — from reimbursing the full amount. Under Iowa’s new Crypto ATM Law, victims of scams are allowed refunds for fraudulent transactions processed through these ATMs.

“I didn’t even know what Bitcoin was, and I still don’t know what it is,” Ratcliff said. “…I hope people are more cautious than I was.”

The scam originated from Ratcliff trying to find a way to fix her internet. She had encountered some connection errors and log-in issues when playing her games, so she decided she would call Mediacom directly. Since she did not know the number off-hand, she did a quick Google search and found a number.

But the phone number she found and had called did not reach an operator from Mediacom. Ratcliff explained her issue, and the person on the other end of the line told her a technician could be sent to her house tomorrow but she needed to submit a down payment of $70 beforehand.

“Which gave me a red flag because normally they just put it on your bill,” she said. “But I said, ‘Really?’ And he said, ‘Yeah.’ OK. So I gave him my credit card number and my credit card actually came back and said this could be fraudulent. And I thought I’m going to give them the benefit of the doubt.”

In hindsight, Ratcliff knew she should have trusted her instincts or listened to the warnings, but she told herself if a technician didn’t come the next day she would call her bank and report the issues. The technician was a no-show. But instead of calling her banker, she called the number again looking for answers.

The voice on the other end was a man’s voice. When she told him a technician did not show up, the man was in shock. According to his records, that job had been canceled. Ratcliff was in disbelief. She didn’t cancel her request. But the man was insistent. Yes, the job was canceled. How could that be?

Again, Ratcliff thought it odd. But she needed her internet fixed, and now she has another problem to deal with. What happened to her down payment? The man on the phone seemed concerned about it, too, and he seemed determined to help. He would eventually direct her to someone she could trust.

I’ll tell you what. Stay on the phone. I’m going to direct your call to a police officer, and he will help you through this.

Ratcliff did as he said. This could be really serious, she thought. Sure enough she was transferred to that supposed police officer, who told her that someone was trying to get money out of her account. The police officer rattled off some names and asked if she knew them. No, they weren’t familiar at all.

The officer told her several people have been going to her bank daily and altering her bank account. Ratcliff was startled by this revelation. But the officer had a solution. He told her to stay on the phone, get in her car and go to a specific kind of ATM. There just so happens to be a few in Newton.

Cryptocurrency ATMs are physical machines or kiosks that allow people to insert cash or credit/debit cards to purchase Bitcoin.

The officer instructed her to go to Fareway in Newton and deposit her money into a Bitcoin account. Ratcliff did not understand how depositing money would get her money back, but the voice over the phone was persuasive and assured her that she would get reimbursed when it was all settled.

All the while the officer talked her through what to do, and when he wasn’t giving her instructions he bombarded Ratcliff with questions about the people who might be trying to steal her money, keeping her in a constant state of terror. Ratcliff would go on to deposit $1,000 into the Bitcoin ATM at Fareway.

After the transaction an employee from Fareway approached Ratcliff and warned her that some scams had been happening with that machine lately. Before she could have a chance to think it over, the officer instructed her to leave the grocery store and get back in her car. But stay on the phone. Don’t hang up.

The officer said Ratcliff had to go to another machine at Niemann Ace Hardware. But when she arrived there was a sign over the Bitcoin ATM saying it was out of order. The officer instructed her to go to the Casey’s just off exit 168 of Interstate 80, but Ratcliff could not find any sort of machine at that location.

Still, the officer told her to try another gas station nearby, which turned out to be the BP gas station — also known as the KC Store — across from Cobblestone Inn & Suites. Ratcliff found the Bitcoin ATM inside the store and deposited another $1,000 into the machine.

Ratcliff made the officer aware her cellphone was running low on battery, but he assured her they were finished and that everything was OK.

“It was the weirdest thing, because after I got off the phone with this man things were going through my head like, ‘What the hell did I just do?’” she said. “Why did I give them $2,000? It drained me of everything that I own. Why was I so stupid? It was like I was hypnotized.”

Her son encouraged her to go to the local police station. The next day she spoke with an officer — a real police officer — and learned the awful truth.

She hadn’t called Mediacom. She didn’t talk to an operator from the company. She wasn’t even transferred to a real cop. She was deceived and taken on a wild goose chase around town to convert her traditional currency into cyptocurrency accounts. She had been scammed.

“It’s just scary,” Ratcliff said. “Some people who get scammed have a lot of money, but I don’t.”

NEWTON BANKS ARE WORKING TOGETHER TO COMBAT FRAUD

When Newton News contacted Ratcliff over the phone for an interview, she was clearly hesitant over answering a call from an unknown number.

“…Hello? Is this Linda?”

“Who wants to know?”

Lesson learned. Her coarse and speculative tone was understandable given her experience. It has changed her, and she now approaches phone calls with extreme caution. Ratcliff also has Mediacom’s real number saved, but she is still leery to call just about any number. Especially those she finds online.

Advantage Credit Union has been helping Ratcliff reclaim her money. The bank has issued a number of fraud warnings to its customers and the community for some time. Jeff Holschuh, vice-president of member engagement and service, said the bank filed fraud claims for Ratcliff and worked with the attorney general.

“Fraud is so prevalent, especially with Bitcoin transactions,” Holschuh said. “Once that money is gone, it’s gone. It’s virtually untraceable.”

However, the Crypto ATM Law does offer some protections, provided individuals reported the fraud transaction to the cryptocurrency ATM operator and a government or law enforcement agency. Reports must be made within a certain timeframe, too, and proof or evidence must be provided.

According to the Iowa Attorney General’s Office, police reports and sworn declarations explaining the fraud may suffice.

Holschuh said it is a shame people have to go through these kinds of incidents, which is why he and Advantage Credit Union are always trying to educate people on the kinds of scams that are out there. Banks in Newton are even working together to combat fraud and scams in the community.

They’re calling themselves the Newton Fraud Coalition. Holschuh said the group maintains the privacy of their respective customers and does not discuss individual cases but rather fraud trends happening in the area and how they can collectively combat them.

“The Credit Union philosophy is people helping people,” Holschuh said. “I think our new tagline here is: empowering financial success. So the way to empower people is to inform people, and to keep them on that path they have to be educated. Let’s be honest there is a lack of financial education on all fronts.”

Everyone deals with money, Holschuh added, so it is critical to make sure people are educated on red flags or keep up to snuff on the changing technology.

“We’re a small enough community and we all share people in that aspect,” he said. “We want to make sure the experiences are the same so that if someone has fraud at the Credit Union and they go over to a different financial institution we can all have our little fraud antennas up and say, hey, this isn’t right.”

Holschuh encouraged people to talk about their experiences with fraud. The worst thing people can do, he said, is keep the information to themselves. Doing so only protects the scammers. Knowing other people have been affected by it increases awareness and can decrease the chance of it happening again.

“Until we talk about it, nothing gets resolved.”

If you believe you have been a victim of a scam through a cryptocurrency ATM, contact the Iowa Attorney General’s Office by phone at 515-281-5926 or 888-777-4590 or by email at cryptoscam@ag.iowa.gov. Individuals should also contact their local police department or sheriff’s office.